ACCOUNTING GLOSSARY
Gross Margin
Gross Profit Margin
Gross profit expressed as a percentage of revenue.
What does Gross Margin mean?
Gross profit expressed as a percentage of revenue. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Gross Margin in context
$350,000 gross profit on $1 million revenue equals a 35% gross margin.
Why it matters in financing
Gross Margin can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related accounting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.